NSW Police arrested the man, from Bruce, on Thursday afternoon. He is believed to have fled a car in which officers later found a dead body.

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Officers investigating the death of the woman confirmed the arrest at 4.45pm before he was taken to Batemans Bay police station.

Daniela D'Addario.

The man was arrested in the same area where a major search had taken place earlier in the day, involving two helicopters and the police tactical response unit.

The 27-year-old was reportedly arrested after a Channel 7 cameraman spotted him hiding in nearby bushland.

The body of the woman - who police believe is missing Daniela D'Addario, 35 - was found in the car's boot after officers stopped the blue Hyundai Getz with ACT registration plates on the Tathra Bermagui Road at Cuttagee Point about 8.30pm on Wednesday.

Police said a man ran from the car, escaping into bushland near Bermagui, when police stopped it. Officers spent about 14 hours looking for the man before calling off the search.